Lehigh Valley Real Estate Blog, Home Buying & Selling Information

Pent-Up Buyer & Seller Demand about to be Released?

 

 

American consumers’ perception of the residential real estate market was revealed in a recent survey by Edelman Berland. They interviewed 2,500 Americans who are “in the market” to buy or sell a home. Respondents were between 25-64 years old with a household income of at least $50,000.

Here are the key findings of the survey:

BELIEF in the HOUSING MARKET

There is a strong belief among this segment of the population that the housing market is on the right track and that is committing almost 7 out of 10 to buy or sell a home this year. Millennials belief in real estate is actually higher than the overall population.

• 77% of consumers (and 85% of Millennials) have a favorable view of housing
• 79% of people (and 83% of Millennials) believe the housing market is on the right track
• 69% of consumers said they are committed to buying or selling a home now

CHALLENGES

The extreme weather faced by much of the U.S. definitely delayed many real estate transactions. That pent-up demand is now being released causing price appreciation in many regions of the country. This rise in prices and the expected increase in interest rates is causing many purchasers to buy sooner than later.

• The main reason (45%) people waited to make a real estate transaction is they were waiting for spring weather to arrive
• 76% of consumers believe that pent-up demand will create even more competition for existing homes
• 74% of consumers are most concerned about higher than expected prices when buying a home this spring
• 83% of consumers are motivated to act sooner than later because they fear interest rates will increase

Other interesting findings from the survey (broken down by buyers and sellers):

Buyers

• 80% of real estate consumers are more committed to buying
• 78% of potential buyers said it will be easier to purchase a home this spring since “homeowners want to sell”
• 72% are encouraged because “the economy is improving”
• 46% of buyers said spring was a more favorable time to buy a home
• 28% of buyers said summer was a more favorable time to buy a home (an 8% increase over last summer)

Sellers

• 83% of real estate consumers are more committed to selling
• 63% of sellers are buoyed this spring by the improving economy and their perception that buyers are motivated following the difficult winter

Bottom Line

The real estate market will continue to gain ground through the summer as more and more people realize this is a great time to move. And, the vast majority (88%) of those surveyed realized that hiring a real estate professional is important to their home buying or selling success.

June 4, 2014 via KeepingCurrentMatters.com

Lehigh Valley May 2012 Real Estate Market Conditions

May was a great month for Real Estate in the Lehigh Valley!

Last month, 772 homes went under agreement in the Lehigh Valley. That is an increase of 48.9% from the number of homes that went under agreement in May of 2011 (485 homes).

521 homes were sold and settled. That is an increase of 14.8% from a year ago (454 homes). Homes that sold and settled in May actually went under agreement in the March/April time frame. A busy spring.

In May of 2012, there were 4,883 homes for sale (a decrease of 2.1% from May of 2011).

Out of the 4,883 homes for sale in May, 749 of them were bank owned or foreclosures. Foreclosures are 15.3% of the homes that are currently listed for sale in the Lehigh Valley.

The median price of Lehigh Valley Homes for sale in May was $182,000. The median price of homes under agreement was $173,000 and the median price of homes sold and settled was $162,000.

The average days on the market was 77.

For all of your Lehigh Valley Real Estate information, visit www.lehighvalleyhomesonline.com.

Lehigh Valley Foreclosures – Dealing with the Inspection and Utilities

Foreclosure Properties in the Lehigh Valley are sold As-Is. Even so, as a buyer of a bank owned property, you have the right to get a property inspection done. Based on the results of that inspection, you can either accept the property or walk-away. If you decide to walk, you will get your deposit (escrow) back but you will be out the cost of the property inspection (~$400.00). This is a small price to pay to know exactly what you are purchasing.

The problem is that almost all bank owned (foreclosure) properties in the Lehigh Valley have been winterized (water turned off and plumbing system has something similar to anti-freeze put into it). In addition, the gas is usually off or the oil tank may be empty. So, how do you do a complete property inspection when all of the utilities are off (electric may or may not be on)?

In some situations, the bank may be willing to get the home de-winterized and the utilities turned on but in others it is up to you, the home buyer, to have this done.  Add in the cost of the property inspection and the expenses start going up for a property you aren’t even sure you are definitely going to purchase.

Last week. UGI would not turn on the gas unless the water was turned on (even though it was a forced air system). On Saturday morning, the water was turned on and the system was completely charged. UGI came out on Saturday afternoon and turned on the gas but couldn’t get the furnace working. Now we had a house with the water on and NO HEAT. Thankfully, it wasn’t a week earlier with outside temperatures in the teens.  UGI came back out on Monday, fixed the heat problem and the buyer successfully closed on the home.

A Foreclosure Property can be a good deal but the process to verify what you are purchasing is a little more difficult. The home owner is gone. A history of repairs/modifications to the house as well as utility costs is typically not available.

When buying a foreclosure property, more diligence is required on the buying side to ensure you know exactly what you are purchasing.

More information is available at www.lehighvalleyhomesonline.com

Lehigh Valley Real Estate Market Conditions

   Monday Market Update

Now that 2008 is over, it's time to take a look at the Lehigh Valley Home Prices over the past three years. Let's take a look at some specific real estate data for 2006 thru 2008. I selected Bethlehem Township (on the east side of the valley) and Macungie (on the west side of the valley) for this posting.

During the next few weeks, I'll be updating the data on www.lehighvalleyhomesonline.com for all of the municipalities in Lehigh Valley.

Bethlehem Township
	2 Bedroom	3 Bedroom	4 Bedroom	5 Bedroom	Minimum	Maximum	Average	Median
2008	$175,236	$223,784	$321,728	$511,938	$41,000	$1,000,000	$266,318	$248,000
2007	$199,679	$241,293	$348,418	$497,038	$49,000	$1,150,000	$284,078	$268,450
2006	$162,053	$242,358	$350,056	$477,740	$17,500	$1,250,000	$289,765	$270,000
Macungie (including Upper and Lower Macungie)
	2 Bedroom	3 Bedroom	4 Bedroom	5 Bedroom	Minimum	Maximum	Average	Median
2008	$174,951	$219,735	$344,791	$399,557	$8,000	$1,500,000	$278,098	$265,000
2007	$178,443	$230,520	$368,348	$415,807	$11,250	$1,075,400	$288,359	$276,950
2006	$173,965	$229,142	$360,937	$461,274	$10,000	$1,010,000	$284,779	$272,500

Information provided by Rappatoni MLS and deemed reliable but not guaranteed for the date range of 01/01/06 through 12/30/08.  It does not reflect future sales, or currently listed homes.

In Bethlehem Township, the data shows that from 2006 to 2007 the home prices stayed relatively flat (some ranges increased some decreased). From 2007 to 2008, we see that prices went down between 5% -10%.

In Macungie, a similar trend occured although Macungie wasn't affected as much in 2007. In 2008, the prices decreased between 5% - 10%.

During this time, interest rates also went from a high of around 7% to back down around the 5% level.

So, what does this all mean. If you purchased a house in 2006 for $200,000 with a 6.5% mortgage your monthly P&I (principle and interest) is $1220.00 (FHA 3.5% down).

If you get the house for $20,000 less but the interest rate is 5.0% your monthly P&I is $933.00 (FHA 3.5% down). Over a $300.00 difference per month from the 2006 prices/interest rates.

If the interest rate goes back up to 6% then the P&I is $1042.00. If the house prices decrease another $10,000 but the rates remain at 5% then the P&I is $881.00.

Confusing? Let's put it into a table for clarity

Purchase Price	Interest Rate	P&I
$180,000	5.0	$933.00
$180,000	6.0	$1042.00
$170,000	5.0	$881.00
$170,000	6.0	$984.00

What is clear in this table is that the interest rate on the mortgage is a definite factor on determining when to purchase a house. Purchasing that $180,000 house at a 5.0% interest rate is cheaper than purchasing a $170,000 house at a 6% interest rate. Your mortgage payment is over $50.00 more even though the house is $10,000 less.

Interest rates are dependent on credit scores and debt ratios. With banks tightening the guidelines is it in your best interest to wait on purchasing that home?